Marketing management metrics span dozens of efforts and effects both externally and internally. But how do your metrics actually work together to tell executives what to expect?
Measuring progress as a predictor of your company’s financial growth is the way to open doors to funding. The word “progress” in itself is a clue to the “laws of metrics” (like “laws of physics”): metrics for marketing management are not stand-alone figures, but rather, quantifications of a process flow.
Think of marketing as a chain of activities and decisions that originate with an internal or external supplier, proceed from group to group throughout the marketing organization (and sometimes beyond), and eventually result in outputs that collectively influence what customers experience in their dealings with your firm.
It’s Like Physical Fitness
The tendency to focus your metrics attention on end-results, such as uplift, repurchase, NPS, share, and so forth, is faulty. Think of what it takes to meet other goals in business or life, and you’ll see what I mean.
For example, if your friend wants to lose weight, you would probably laugh if he focused his attention on his bathroom scale, shapewear, flattering patterns and lines in his clothing, and charming the people around him.
Your advice would probably be: “as much as all that is certainly more fun to do, you’re really going to have to hit the gym on a regular basis, mix cardio and strength training to manage heart rate and metabolism, be religious about portion control and a balance of carbs-fats-proteins, and get enough sleep.” Pure and simple, that’s the hard truth you’d give your friend, right? You might even suggest a tracking device or website or coach that can monitor activity, exercise, food, and sleep. Bingo: that’s the way it works for marketing metrics, too.
Two Predictive Paths
There are two paths of metrics for marketing management you should be monitoring in order to see clearly what’s predictive of the beloved end-results: (1) action plan metrics and (2) program metrics.
Action Plan Metrics
Like the fitness example above, these metrics can be diagrammed as internal process check-points that give you an early heads-up about whether you’re on-track. If your in-process metric indicates that you’re likely to produce scrap, re-work or disappointment down the line, then you should be able to make adjustments in your work to get it back on-track before those nasty things happen.
When you’ve identified something to measure that allows this, it’s a leading indicator. “Leading” because you see it before your stakeholder is aware of its output.
To identify good action plan metrics, start with an intended business outcomes:
(a) what’s holding you back from achieving the outcome?
(b) what could accelerate the outcome?
You may be tempted to zero-in on (b) because it appears to be the ticket to success. Yet change management studies show that humans are slower to embrace the positives when there are still a lot of negatives in-play for them.
Think of it like a sailboat: rough waters or heavy anchors mean that attempting to catch strong wind in your sails could be disastrous with rips in the sail cloth or even cap-sizing of the boat. This gives you a clear idea of why it’s absolutely necessary to address (a) in a systemic, root-cause-eradication way.
Ask yourself why (a) is happening in order to identify reasons for the setback. Ask why five times, to dig deep into the root causes. Think about ways to eradicate the root causes. Then identify a metric that gives you a heads-up about your progress in eradicating it. This is a predictive leading indicator.
A key role of a marketing operations professional is to facilitate ownership of smart management practices across all marketing groups. Everything they do contributes one way or another to the marketing organization’s success. As such, it’s essential to monitor their ownership progress and your facilitation progress.
Examples include: % of departments tracking leading indicators, % of action plans on-track, % of employees participating in cross-functional teams to tackle a big issue, % of employees who know how to use lean/six-sigma methods to address problems wisely, and so forth. These are leading indicators of the action metrics, because they reflect internal engagement necessary to “move the needle” across the flow of activities that lead to intended business outcomes.
Connecting Leading & Lagging Indicators
To empower your friend in his ongoing pursuit of physical fitness, you’d probably recommend that metrics from his tracking device be placed side-by-side the metrics from his bathroom scale and clothes sizes and compliments from friends and acquaintances.
The tracking device represents leading indicators (predictive heads-up trends) and the scale/clothes/compliments represent lagging indicators (end-results = business outcomes).
When leading and lagging indicators are shown together on a dashboard, it’s empowering and enlightening. Do this with your program metrics, action plan metrics, and customer engagement/voice metrics for marketing management. Add context with operational and financial metrics, and you’ll enable others to see the whole picture toward your company’s financial growth.